The simple answer to this question is; possibly! Employees can be paid the National Minimum Wage (NMW) whilst sleeping either at work or, in some circumstances, away from the workplace. There has been a flurry of recent case law in this area and I have been involved in a successful case before the Employment Appeal Tribunal very recently. Employers and employees alike are entitled to ask the question – should I pay/be paid the NMW when asleep at work?

Employees who are not duly paid the NMW over the relevant pay reference period can enforce the payment of arrears in one of two ways:

1. issue a claim at the Employment Tribunal, usually for Unlawful Deduction from Wages (if within relevant time limits);
2. report the employer to HMRC who will undertake an investigation into whether the NMW has been paid. A HMRC officer will be appointed to carry out an audit of the employer’s pay records and will then issue a Notice of Underpayment if it is found that the NMW has not been paid to a relevant employee or employees. As well as requiring payment of the underpayment, a penalty will be imposed which is currently 200{ba3215b0bf35eaeb06be458b3396ffbfc50bb9db10c9ff1594dfc3875e90ea48} of the total underpayment (subject to an overall maximum penalty of £20,000 per underpaid worker). Employers will also be “named and shamed” as underpayers.

Defining Work

There are four different types of work defined in the National Minimum Wage Act 1998. These are:

1. Time Work – this covers work that is paid by reference to the time that a worker works. A good example of this is hourly-paid work.
2. Salaried Hours Work – this is where an employee is paid for a fixed number of hours work a year by an annual salary.
3. Output Work – this is work which is paid according to the worker’s productivity, for example an employee who is paid commission.
4. Unmeasured Work – this category covers workers who do not have set hours or an annual salary and who are not paid according to what they produce.

Working or on-call?

This is where many employers are forgiven for being confused and often failing to pay their employees the required NMW. There can be a variety of circumstances in which employees are required to be “on-call” or on “standby” overnight or for set hours during the day. They may be permitted to sleep during this time or only be required on an emergency. Employees may be expected to remain on the premises or be permitted to be on-call at home. Many employers have paid employees a set rate for this “on-call” time, believing they were not actually working and so not entitled to be NMW. The problem facing employers is – when does an employee qualify to be paid for the NMW?

There is much case law on the question of whether an employee is actually working or merely available for work. The relevant legislation to consider is the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 2015.

The Tribunal will consider the following factors when deciding if an employer is indeed working or merely available for work:

• Is presence at the premises part of the job? Case law has dictated that there is a distinction between employees who are required to be present at work as part of the job itself, and employees who are not required to be present but are genuinely “on-call”. Cases such as Scottbridge Construction Ltd v Wright [2003], which involved a night security guard who was required to be present as part of his job, and Whittlestone v BJP Home Support Ltd [2014] which involved a carer who was required to sleep at a disabled person’s house overnight, involved workers who were not allowed to leave the premises in question even though they were allowed to sleep.
• Is there a statutory requirement for the employee to be on the premises? In the case of Esparon t/a Middle West Residential Care Home v Slavikovska the care home was under a statutory obligation to ensure that qualified and competent persons were present at all times to safeguard the health and safety of residents. Such a statutory duty was a “powerful indicator” that the workers were being paid to be present, regardless of whether any other duties were carried out and were therefore working.

Case Law

The following cases concluded that supposed “on-call” time was in fact working time:

1. British Nursing Association v Inland Revenue (2002)

The Court of Appeal (CoA) held that nurses providing a night service via telephone from home were in fact doing time work through their shift and not merely on call.

2. Burrow Down Support Services Ltd v Rossiter (UKEAT/0592/07)

This case involved a night watchmen at a care home. He was allowed to sleep for much of his shift. The EAT ruled that he was entitled to the NMW for each hour of his shift. Even though he was allowed to sleep, he was still required to deal with any issues arising during the course of his shift. He was therefore working even whilst he was asleep.

3. Whittlestone v BJP Home Support Ltd (UKEAT/0128/13)

This case involved a care worker who was entitled to be paid the NMW for the whole period for which she stayed at the homes of young adults and cared for them. She was provided with a camp bed and permitted to sleep. She was required to be present throughout the period and would have been disciplined if she left.

4. Esparon t/a Middle West Residential Care Home v Slavikovska (UKEAT/0217/12)

Here, a care assistant was also a resident of the care home and did “sleep-in shifts” through the night at the rate of £25 per night. She was permitted to sleep during these times but was required to be on the premises to carry out certain duties and deal with any emergencies. A tribunal concluded that all her night shift hours were working time for NMW purposes.

Summary

The law relating to the NMW is complex and employers need to consider carefully whether they have employees who are not being paid the NMW but should be. This will in all likelihood affect employers who have staff working on call shifts or “sleep-in” shifts either at their premises or at home. There are severe penalties imposed by HMRC if it is found that an employer has not been paying the required NMW to its employees, ignoring the cost, time and stress of dealing with an HMRC inspection. Ultimately, whether an employee is working or merely on call will be decided by the facts and circumstances of the case and employers are encouraged to seek expert legal advice if they are in any doubt.

We have a lot of experience in these cases and in recent months we have been involved in a NMW case in the Employment Tribunal which was then appealed to the EAT.   We have also assisted a number of clients with HMRC inspections. If you require any further information or have any questions please contact me.